The unfinished entrance of the Aurora Sun greenhouse is shown in this March 2021 file photo. - NEWS FILE PHOTO
cgallant@medicinehatnews.com@CollinGallant
The owner of the partially completed Aurora Sun facility in Medicine Hat says it is encouraged by the conversion of a similar massive greenhouse and processing facility in Leduc.
Aurora Cannabis now plans to keep the local facility by selling it to a subsidiary.
Without specifically outlining future plans, Aurora said in financial reports released in June that the 1.2 million square-foot greenhouse will be transferred to a subsidiary that grows ornamental flowers for retail and vegetable seedlings for major greenhouse operators.
Aurora officials pointed to statements in the company’s earnings release when asked for further comment by the News.
Any change of use in the future would be announced when finalized, read a statement.
Revenue from that new subsidiary, Bevo Agtech, helped the long-struggling cannabis company post positive earnings before adjustments for a second quarter when results were announced in June.
CEO Miguel Martin said the conversion of the 800,000-square-foot Aurora Sky facility near the Edmonton International Airport was fully complete and results showed $16 million in added revenue in the fist six months while medicinal and consumer cannabis segments were stable.
“Bevo’s financial contribution could be significant,” he said. “This rapid expansion serves to increase Bevo’s production capability and extend its shipping range in Canada and the U.S.
“Now that we expect to see positive adjusted EBITDA on an annual basis, we see our next financial milestone of maintaining a net cash position and generating positive free cash flow.”
Bevo Agtech was acquired by Aurora last fall when the Edmonton-based cannabis company transferred the former pot-growing facility to the established B.C. greenhouse firm, along with cash to acquire 50.1 per cent of the new company.
At Leduc, Bevo grows orchids and vegetable starter seedlings sold wholesale to other major greenhouses.
“Bevo business is steady and predictable and supports our ability to generate positive adjusted EBITDA and eventually positive free cash flow,” said company chief financial officer Glen Ibbott.
At the same time of the Bevo acquisition, Aurora announced a pending sale of the Sun property – announced in the spring of 2022 – had been halted when an unnamed potential buyer failed to meet closing conditions.
Aurora Sun was to be a larger twin to Aurora Sky when it was announced at a 2018 Medicine Hat city council alongside a major power agreement and forgiveness of $6 million in development fees at the 71-acre site.
Building was halted in 2020, however, and listed it for sale as part of a major production realignment for its medicinal and recreational marijuana market.
It was designed to produce 264,000 kilograms of flower annually, though the company only sold 13,000 kilograms in the last quarter.
Financial documents released last month now state the numbered company that holds the ownership Aurora Sun and related initial processing centre will be transferred to the Bevo portfolio. It is valued at $34 million for accounting purposes when it was shifted back the Aurora’s balance sheet from a list of properties “held for sale.”
[Editor’s Note — This article has been updated to correct a typo.]
